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Monday, 20 December 2021

Cleopatra board greenlights CI Capital’s bid

CHG gives the nod to CI Capital’s acquisition bid: Cleopatra Hospital Group’s (CHG) board of directors has approved a bid from CI Capital to acquire up to 26.2% of the company, according to an EGX filing. MCI Capital Healthcare Partners, the CI Capital subsidiary that’s executing the acquisition, last week got the greenlight from the FRA on its voluntary tender offer to purchase up to 419.3 mn shares at EGP 5 apiece, valuing the company at EGP 8 bn.

The rationale: CI Capital’s offer is 14% higher than CHG’s average share price over the past six months, which stood at EGP 4.40, and 12% above the company’s average share price during the three months prior to the offer, roughly EGP 4.46, the board noted. The fair value of the company has not been assessed by an independent financial advisor, a source familiar with the matter previously told Enterprise.

CHG’s shares dipped 0.8% yesterday, closing at EGP 4.86 per share, but have generally traded higher since surging 4.7% to close at EGP 4.70 on 8 December, the day the acquisition was announced.

What’s next for shareholders? CHG shareholders have until Sunday, 26 December to subscribe to MCI Capital’s VTO, according to the timeline set by the EGX last week. Shares will change hands within five working days of the end of the tender offer, by Sunday 2 January.

Shareholders already on board: Creed Healthcare, which owns 37.9% of CHG through its subsidiary Care Healthcare, has agreed to sell an 8-12% stake in the company from its holdings (126 mn-192 mn shares) at the offer price. Emerging markets private equity giant Actis manages Neoma Private Equity IV, which is the single largest shareholder in Creed. Mid-market investment firm RMBV’s Ahmed Badreldin helped create Cleo and is now chairman of the board, sitting as a representative of Creed.

The CHG transaction caps a strong year for CI Capital, which most recently advised Aldar and ADQ on their acquisition of an 85.5% stake in upmarket real estate developer SODIC. CI has now closed six transactions in Egypt worth a combined USD 1.6 bn in 2021, the firm said yesterday in a statement (pdf). On the IPO front, CI was the sole global coordinator and bookrunner for the USD 131 mn listing of Taaleem and was joint global coordinator and bookrunner on the IPO of e-Finance, Egypt’s biggest listing in the past decade.

ADVISORS: Zulficar & Partners is acting as legal advisor to MCI Capital.

EDITOR’S NOTE- Corrected on 26 December, 2021.

A previous version of this story stated that MCI Capital would purchase up to 339.3 mn shares in Cleopatra Hospital Group. The correct figure is 419.3 mn shares. 

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